Hospital Misinformation
To the Editor:
In his letter to the editor dated Jan. 19, Don Carpenter blamed the closing of St. Mark’s on government interference in the free market and argued that if the government only focused on making the market free and honest that our hospital would still be up and running. Mr. Carpenter suggests that without Medicare or Medicaid we would have a hospital offering “abundantly available healthcare services at real costs.” However the issue is much more complex than that.
Medicare and Medicaid are simply health insurance programs offered by the government. They help the elderly and people with limited incomes afford healthcare. These programs, like private insurance, will pay hospitals for services rendered. His only argument is that these programs constitute government meddling and that a truly free market would have kept St. Mark’s open. He does not elaborate on how these programs impacted St. Mark’s closure or how their absence would encourage more services at lower costs.
It is not just St. Mark’s; rural hospitals across the nation are facing the threat of closure. Since 2005, 104 rural hospitals have closed in the US and currently more than 600 are at a risk. The primary reason across the board is lack of funds. Running a hospital is expensive and it is not the fault of Medicare or Medicaid. For example, the median income of an ER doctor in Texas is $362,000 according to Salary.com and any hospital that operates an emergency room needsanERdoctoronstaff24/7. Surgeons earn even more and a staff of nurses will each earn a median income of $68,000. Drugs, medical equipment, and procedures have made steady advancements, further increasing treatment cost. The average R&D expenses to develop a cancer treatment is $4.4 billion according to the Journal of Pharmacology Policy and Practice, and they take years to bring to market. Healthcare is expensive to provide and expensive to buy which is part of the reason why hospitals struggle in rural communities where the population cannot bring in the revenue to support their operating costs.
The federal government recognized this issue as early as 1997 when the Critical Access Hospital Program (CAH) and the Rural Hospital Flexibility Program were adopted to incentivize rural hospitals to add and maintain more services for rural populations who tended to use Medicare and Medicaid more than city dwellers. For rural hospitals that qualified under CAH, services rendered for Medicare patients were reimbursed at a rate of 101% of reasonable cost. Without CAH and the money from government insurance programs, more rural hospitals would have closed or further reduced their services.
I also fail to see how not having Medicare or Medicaid would make running a hospital less expensive and result in them being profitable. One could argue that navigating Medicare or Medicaid billing and payments requires extra staff, but private insurance companies are more numerous and just as complicated.
Furthermore, if left purely to the free market there would be fewer rural hospitals not more. I am not against the free market but healthcare is not the same as competing brands of cereal. If a hospital fails to make a profit it does not have the flexibility to drop prices and services. Drugs do not get magically cheaper and doctors do not work for less, especially when rural areas already struggle with attracting professionals.
All but the most dogmatic libertarians would say that a hospital should treat an uninsured car crash victim. So who pays? Hospitals offset the cost of the uninsured by charging insured patients more. According to the American Medical Association, states that expanded Medicaid saw charity care provided by hospitals decline 30% on average during the first year, whereas in non-expansion states (Texas was a non-expansion state), the average amount of charity care over the same period increased by 10%. Therefore these programs help hospitals save money and help consumers pay for services and are not responsible for the problems brought up by Mr. Carpenter.
In conclusion, in addition to the unique challenges faced by St. Mark’s, the closure of it and other rural hospitals is due to issues unrelated to the programs he attacked and in fact they are beneficial for hospitals and patients.
Kevin Obkirchner La Grange